THE STATE AND THE ECONOMIC SYSTEM: An Introduction of the History of Political Economy by Phyllis Deane

THE STATE AND THE ECONOMIC SYSTEM: An Introduction of the History of Political Economy

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An engaging intellectual history of the ""dismal science"" of economics. Although Aristotle and St. Thomas Aquinas touched on some economic issues such as determining a ""just price"" and usury, comprehensive thinking about the material basis of societies really began in the 17th century, when the flowering of capitalism and the rise of centralized nation-states created the need for commercial and income statistics by national governments. Deane notes: ""The search for systematic regularities in economic behaviour that motivates the scientific activity called political economy--now commonly referred to as economics--originated in response to the information needs of central government policy-makers."" Economic questions engaged the attention of some great philosophers, e.g., John Locke, who wrestled with the question of usury and concluded that state attempts to set interest rates were self-defeating. Deane discusses extensively the pivotal role that Adam Smith's An Inquiry into the Nature and Causes of the Wealth of Nations played in the history of economics, and also details the contributions made by Rev. Thomas Malthus, stockbroker David Ricardo, the philosopher John Stuart Mill. She shows how Marx combined his distinctive brand of Hegelian dialectics with Ricardo's labor theory of value to create his theory of class warfare. Even as the first volume of Das Kapital was coming off the presses, its intellectual underpinnings, especially the labor theory of value, were being decisively undermined by what has since been called the ""marginal revolution."" Deane also provides a clear, brief exposition of the contemporary debates over the work of John Maynard Keynes and the U. of Chicago's monetarists. In particular, she acknowledges that Keynesian economics simply failed to predict and cannot offer any policy prescriptions for handling the ""stagflation"" that became endemic during the 1970's. In the end, Deane mars an otherwise evenhanded history of economics by unfairly dismissing ""supply-side economics"" as being merely ""do-it-yourself-economics."" Thorough, cogent, of value to any intelligent reader interested in the intellectual history of economics.

Pub Date: Nov. 1st, 1988
Publisher: Oxford Univ. Press